Top trends driving the automotive sector in 2025 EMG

This trend is reshaping how manufacturers think about scalability and flexibility, particularly as the demand for electric vehicles continues to grow, and will continue to make itself felt throughout 2025. EV technology is the catalyst for transformation—it’s forcing OEMs to rethink vehicle architecture, supply chains, and customer engagement. Battery improvements reduce costs and increase range, making EVs more accessible. EVs also enable new business models like vehicle-to-grid services and battery leasing.

• Demand may decelerate due to the end of Chinese subsidies for EVs, but it should not lead to a decrease.
• Global passenger EV sales grew 60% from 6.5 million units in 2021 to 10.5 million in 2022.
• OEMs like Toyota, Hyundai-Kia, Renault-Nissan Mitsubishi, and Stellantis already have a large portfolio of hybrid variants, including mild and full hybrids.
• What initially appeared to be a niche sector is now the foundation of the auto industry’s transition.
• The US-based startup Launch Mobility develops a platform for a range of shared mobility solutions.
• As we progress through 2025, these trends will continue to reshape the automotive landscape.
• With its focus on next-generation cells and expanded production capacity, Tesla is paving the way for a more efficient and sustainable global EV landscape.
• AI-powered semiconductors drive transformation in autonomous driving systems by enabling real-time communication with road infrastructure and enhancing safety features such as emergency braking systems.
• With the introduction of 5G networks, advanced telematics features like real-time diagnostics, autonomous driving, and improved safety systems are becoming even more feasible.

The global automotive sensor fusion market is projected to reach USD 3.3 billion by 2030 at a 42.4% CAGR. The market reflects its role in meeting strict safety rules and consumer demand for smarter vehicles. AI, additive manufacturing, the Internet of Things, and 5G have become sources of product innovation and manufacturing efficiency, which in turn has led to revolutionary changes in customer experience.

The road to 2025 is set to bring even more dynamic changes, with global collaborations, technological breakthroughs, and bold strategies defining the future of manufacturing. This article profiles the top five Chinese automotive original equipment manufacturers (OEMs) leading the industry in sales volume and market capitalization. The Auto Industry Trends & Startups outlined in this report only scratch the surface of trends that we identified during our data-driven innovation & startup scouting process. Norwegian startup Chargerly designs vehicle-to-building (V2B) solutions that integrate EVs with building energy systems to improve resilience, efficiency, and sustainability. Automotive drivers now expect vehicles to behave like smartphones, gaining features through over-the-air (OTA) updates.

What are the latest automotive industry trends in 2024?

This digital transformation enhances scalability, a key driver in the competitive automotive sector. Companies like Huawei are allocating significant resources to developing EVs with cutting-edge ADAS and autonomous features. These technologies aim to reduce accidents and provide a safer driving experience. As we look ahead to 2025, these trends highlight the challenges and opportunities that manufacturers face. We explore eight most influential trends expected to define the automotive manufacturing landscape, offering insights into what lies ahead for the industry. The European Commission will start talks in the New Year on the future of the industry in the region as sales of electric vehicles stall.

Aadhya Navik designs Ride Safety Software

Without subsidies, demand for EVs on the consumer end could also drastically decrease as was recently seen in Germany after government incentives ended. This may also see American automakers finding more challenges in exporting vehicles to regions in which regulations are more stringent. The market share with EVs specifically is even greater, manufacturing 58% of the world’s electric vehicles.

• On the other side of the globe, in Asia, China has implemented a landmark energy policy, aptly named the ‘Energy Law’, as of January 2025.
• Almost 40% of all autonomous vehicles sold in 2025 are predicted to have L2 ADAS features.
• Battery improvements reduce costs and increase range, making EVs more accessible.
• This centralization allows faster product cycles, OTA updates, and cross-domain features.

Q) What are the predictions for the automotive industry?

Modernized and upgraded vehicles with much more technology allow a thunder growth for the markets providing parts of the vehicles. Conversely, in Europe, regulations are scaling up in preparation for the EU ban on new ICE vehicles by 2035. Chinese EV automakers’ expansion into new markets, including Europe, other Asian countries, and Latin America as previously mentioned, could see a completely new global EV landscape. Perhaps the biggest shift here is in a new manufacturing landscape, with new decentralised hubs across the globe producing EVs for local markets.

It’s estimated that to meet many of these net-zero emission goals, EVs will have to climb to at least half of all new car sales by 2050. Countries and states that have committed to phasing out the sale of internal combustion engines. By the end of that decade, it’s predicted that over 30% of the cars on the road will be EVs. The massive rotation in the global vehicle fleet is predicted to take place in the 2030s. Bloomberg New Energy Finance expects EVs to account for 10% of all new car sales by 2025 and 58% by 2040. After a disappointing 2019 in terms of EV sales, 2020 sales surpassed expectations, growing over 40% year-over-year.

Rise in autonomous self-driving cars

In these regions, shared mobility options like vans, minibuses, and two- and three-wheelers are more common and often electrified due to their affordability. In India, for example, electric car sales rose by 70%, driven by government incentives and new models, though future growth may be impacted if it sees subsidy reductions. The automotive manufacturing industry is evolving rapidly as manufacturers respond to technological advancements, consumer preferences, and regulatory changes.

What are the Top 10 Trends & Innovations in Automotive ( ?

The automotive V2X market reached USD 2.87 billion in 2025 and is expected to expand to USD 18.67 billion by 2030 at how to read a Carfax vehicle history a CAGR of 45.43%. This rapid expansion reflects its role in reducing road accidents, enabling connected mobility, and smart city systems worldwide. Moreover, the startup engineers the ECU platform with compliance to ISO for functional safety.

In the first half of 2023, electrified vehicle production surged by 70%, highlighting the rapid pace of investment in EV production capabilities, and continues to grow. As battery technologies evolve, the future promises breakthroughs in recyclability and energy efficiency. Innovations like solid-state batteries are set to revolutionise manufacturing priorities and reshape the EV supply chain.

• The global automotive semiconductor market is projected to grow from USD 53.57 billion in 2025 to USD 86.81 billion by 2033, with a CAGR of 6.22%.
• Moreover, automakers offer features on demand as they are turning cars into service platforms.
• 2025 is no exception—automotive manufacturers are expected to continue implementing more and more advanced safety features in their vehicles.
• Autonomous driving is a key innovation driver but remains in a development and regulatory phase.
• Also, radar ensures long-range detection of moving objects in all weather conditions, which is critical for adaptive cruise control and highway safety.
• Volvo has adopted megacasting techniques to simplify EV production, reducing the number of components required and streamlining assembly processes.
• Indian startup RevitsOne offers AI-powered fleet-management software that is suitable for fleets of varying sizes.

NuNami designs Vehicular Interface Systems

After the pandemic, we developed a habit of shifting all requirements to online methods, and so do goes with the automobile industry. Our new generation which is called millennials or Genz researches everything online before the actual purchase. Consumer trends in the automotive industry reveal that short videos are more effective than text in converting leads into customers in the automotive industry.

The startup’s platform combines augmented reality (AR), smart camera, and surround-view monitoring to illuminate the route on turns, curves, slopes as well as complex junctions. This assists the drivers in keeping lanes, prevents collisions, and enables autonomous driving options. Moreover, the solution is customizable to any car model or specific OEM requirements. Additionally, smart virtual assistants are emerging as a key HMI feature, aiding drivers and passengers in interacting with vehicles and external services. The global Automotive Human Machine Interface market, valued at USD 70.41 billion in 2022, is expected to grow significantly, reflecting these advancements in automotive technology.

📱 The Digital Dealership Experience and Online Sales

These pods use AI and machine learning algorithms for real-time perception and adaptive decision-making. The startup’s technology allows these pods to adapt across industries, enhancing efficiency and safety in transporting people and goods. Singaporean startup EVIE Autonomous designs electric, autonomous shuttles for last-mile delivery, passenger transport, agriculture, and cargo movement. Its product range includes an electric modular chassis, the standard autonomous shuttle pod, and pods for other applications.

Key players like Bosch, Continental AG, and ZF Friedrichshafen AG are investing in technological advancements. They are focusing on lightweight materials and improved energy recovery efficiency. The automotive regenerative braking market is expected to reach USD 13.83 billion by 2029, growing at a CAGR of 15.8%.

Toyota’s Mirai and Hyundai’s Nexo have been the two major players in the market since sales launched in 2016. Along with an increase in refueling stations, look to see an increase in the variety of FCEVs available to consumers in the coming years. In addition, Hawaii passed a bill in 2022 that will create a hydrogen refueling system rebate for developers. Any infrastructure that’s built after January 1, 2023, and utilizes renewable hydrogen will be eligible for up to $200k. The main issue holding back the popularity of these vehicles is a lack of hydrogen fueling stations. Instead, they get power from a fuel-cell stack that’s fed hydrogen and oxygen to create electricity through a chemical reaction.

What are the predicted future trends in the automotive industry regarding autonomous driving?

Additionally, Europe and the U.S. have sought to bolster their chip and semiconductor production with the ‘European Chips Act’ and the ‘CHIPS and Science Act’, respectively. Whilst these acts have been active for some years now, the landscape has not changed drastically. Until these efforts bear fruit, the industry will need to focus on mitigating risks and prioritising demand effectively. Whilst the U.S. may be bucking it, there is certainly a global trend towards a more sustainability-forward manufacturing scene. However, as with all complex bodies of rulesets, differing rules and regulatory mandates across the globe make it easier for international automakers to fall foul of compliance. Ransomware-related costs in the automotive industry skyrocketed from $74.7 million to $209.6 million in just the first half of 2023.

Dodge Unleashes the Durango Hellcat, Everywhere

For instance, AI-driven intrusion detection systems adapt to new attack patterns and block breaches before they spread. Further, through its smart management app, it enables users to schedule charging, monitor consumption, and manage fleets from one platform. Moreover, the startup installs Tesla motors and Fellten battery systems, which provide up to 295 horsepower, enable flexible range options, and ensure authenticity through fully reversible conversions. Also, adoption rises quickly, with China reaching 50% EV penetration in 2024, and in India, over 18.8 lakh EVs are supported under FAME schemes till June 2025 by the government. Declining battery costs move EVs closer to price parity with combustion vehicles.

Methodology: How We Created the Automobile Trend Report

This coordinates power flows between vehicles, buildings, and distributed energy resources. Also, IoT sensors such as LiDAR and radar expand perception by generating environmental data. For instance, Audi and BMW vehicles exchanged sensor data, including camera feeds, during 5G-V2X Direct demonstrations in Berlin. This data alerted drivers to pedestrians and cyclists before they became visible.

Regulations also support adoption, as safety and emissions standards require continuous updates and smarter architectures. Indian startup SWYTCHD manages vehicle subscription services that focus on electric two-wheelers and cars. This enables an all-inclusive model that replaces ownership with monthly flexibility. Its RC ONE driverless vehicle combines proprietary software and hardware with automotive-grade components to achieve low-speed autonomous operation.

• In addition, the solution works with any EV charger and enables new features to be shipped throughout the network.
• They offer a safe, comfortable, and convenient multimedia experience with on-demand features that allow users to browse the web while in their vehicle.
• The global automotive sensor fusion market is projected to reach USD 3.3 billion by 2030 at a 42.4% CAGR.
• Consumer demand for eco-friendly products is rising, with 80% of US consumers concerned about the environmental impact of their purchases in April 2024, up from 68% in 2023.
• While full autonomy is still years away, incremental advances are reshaping vehicle capabilities and market offerings today.
• This type of vehicle is defined by its ability to communicate with other software systems and collect data from its surroundings.
• Overall, Auto News suggests that analysts expect the chip shortage will result in a loss of 3 million in vehicle production in 2025.
• By 2025, the sector is expected to experience continued technological advances, heightened sustainability efforts, and shifting market dynamics.
• Businesses would start optimizing their search guides as per the consumer’s preferences.

In addition, the IoT’s potential in the automotive industry presents a significant chance for manufacturers to revamp their marketing strategies. IoT solutions can offer numerous benefits to end-users by utilizing interconnected systems, such as better safety, driving assistance, and predictive maintenance. Collecting user data through these sensors creates ample opportunities for marketers to promote upselling. Automakers and technology companies are forming partnerships due to vehicles’ constantly evolving tech requirements.

These all-inclusive options reduce the financial burdens of ownership, especially for urban users. Vehicle cybersecurity drives one of the fastest-growing areas in the auto industry as connected vehicles multiply and cyber risks intensify. Analysts project the automotive cybersecurity market to increase from USD 5.24 billion in 2025 to approximately USD 18.88 billion by 2034, advancing at a CAGR of 15.3%. Geopolitical risks, regulatory frameworks, cost advantages, and compliance needs drive the auto industry toward supply chain resilience and nearshoring.

• With a computer or smartphone, buyers can choose desired features, secure financing, and even take virtual walk-around and test drives.
• Semiconductors ensure energy efficiency, consistent power distribution, and power the battery systems in EVs.
• Firstly, it accelerates the design and testing process through rapid prototyping.
• IoT, AI, and digital twins are becoming essential tools for improving efficiency, reducing downtime, and optimizing production processes.
• US-based startup TeraDAR designs its 4D imaging sensor that enhances sensor fusion by offering the Terahertz wavelength for vehicle perception.
• Continuous change detection triggers automatic cloud updates to ensure up-to-date navigation information.

Also, advanced composites and recycled inputs reduce reliance on virgin resources. Sustainable manufacturing lowers emissions, which allows automakers to meet compliance requirements and reduce their environmental footprint. Cleaner production methods reduce operating costs and free resources for reinvestment in new technologies.

It incorporates an intuitive infotainment system for efficient power management while minimizing driver distractions. The control system includes safeguards like automatic overheating prevention, battery depletion protection, and real-time torque and speed calibration for optimal performance on challenging terrains. The Asia-Pacific region currently controls the majority of the market due to the strong uptake of electric cars (EVs) in countries like China, India, and Japan.

Investors support companies with strong sustainability commitments, channeling funding toward greener production. The Global Startup Heat Map showcases the distribution of 3836 exemplary startups and scaleups analyzed using the StartUs Insights Discovery Platform. It highlights high startup activity in Western Europe and the USA, followed by India. Unless otherwise noted, this page’s content was written by either an employee or a paid contractor of Semrush Inc.

Autonomous Driving: Waymo Offers 250K Paid Rides Weekly Across US Cities

The startup’s platform, Aqueduct, is easy to install, has 4 charging modules with up to 22kW, provides monthly reports, and uses a Typ2 charging cable. The solution recognizes the power requirements of every car and automatically controls the charging speed for each vehicle. Swedish startup Volta Trucks makes Volta Zero, an electric truck for urban deliveries. This vehicle’s design prioritizes driver safety and comfort, featuring a central driving position and panoramic vision for enhanced visibility. The Volta Zero addresses sustainability by enabling zero tailpipe emissions, contributing to cleaner city environments.

Explore the most important trade fairs and conferences to boost your business success. Contact Avenga today to learn more about what industry experts have to say about these trends. For instance, China has introduced policies encouraging automakers to procure up to 25% of their chips domestically by 2025, reducing reliance on foreign suppliers.

NVIDIA’s DRIVE Thor, for instance, offers up to 2000 TOPS of AI inference performance. It enables sensor fusion and control for advanced driver assistance and autonomous driving. Luxury car brands are experiencing growth due to increased tangible luxury offerings and rising disposable incomes. The demand for sustainable and eco-friendly transportation, like electric luxury vehicles, also drives market growth. The adoption of pre-owned luxury cars is increasing due to easy access to financing and lower entry prices. Manufacturers are investing in innovative mobility technologies, such as personal voice assistance, autonomous driving, and AI and ML, creating a positive market outlook.

• Many of those trends will be on display at the Consumer Electronics Show next week in Las Vegas.
• Geopolitical risks, regulatory frameworks, cost advantages, and compliance needs drive the auto industry toward supply chain resilience and nearshoring.
• Key players like Bosch, Continental AG, and ZF Friedrichshafen AG are investing in technological advancements.
• Further, its V2X-cloud system implementation guarantees uninterrupted connectivity between vehicles and infrastructure.
• Moreover, high-performance computing platforms supply the processing power needed to run these systems in real time.
• With more and more customers prioritizing environmental sustainability, the focus should be on promoting environmentally conscious manufacturing processes along with eco-friendly cars like electric vehicles.

Battery technology has taken centre stage in the EV revolution, and this article provides a deep dive into the leading chemistries and formats that defined 2024. From LFP to cutting-edge solid-state batteries, it examines the trade-offs between cost, performance, and sustainability while uncovering key regional trends. These advancements are critical as manufacturers aim to balance efficiency, durability, and safety.